Road tolls are no longer part of the government's plans, the treasury has announced after dropping its proposal for first such scheme in a decade.

Danny Alexander, the Treasury Chief Secretary, announced that an upgrade to the A14 in East Anglia would be completed without the need for tolls to subsidise the cost, following fierce opposition to the plans.

He added that tolls were not part of any other projects set out under the Government's latest infrastructure plan and were "not part of our plans going forward".

Local MPs and businesses had vehemently opposed the plans to impose a charge for using the 20-mile stretch of road, which is heavily used by freight traffic travelling from the port of Felixstowe to the Midlands.

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The A14 was the only road scheme in government plans which included a toll, but had been widely viewed by campaigners as the "thin end of the wedge" which could lead to similar projects across the country.

The confirmation that the proposal had been dropped came as British insurers agreed a deal to invest £25 billion in UK infrastructure over the next five years.

Discussing the roads schemes in the National Infrastructure Plan, Mr Alexander said: "We were considering whether tolls were appropriate as part of our consultation."

He said there had been a "very strong response" to a consultation on the plans, and that the treasury had decided it could fund the project without a toll.

"We don't have proposals for tolls on any of the other projects that we have set out," he added. "That is not part of our plans going forward."

Roads Minister Robert Goodwill added: "The decision not to toll the A14 shows this Government has listened carefully to the concerns raised by members of Parliament, local residents, businesses and haulage operators who rely on this road on a daily basis."

Paul Watters, head of roads policy for the AA, said the announcement would be a relief to motorists who had widely viewed the A14 toll plan as a "Trojan horse" to introduce similar charges across the country.

"UK motorists pay £46bn in motoring taxes each year and yet barely a quarter of that goes on road investment – asking drivers to pay to use the A14 with possibly no alternative free route would have been a double whammy," he said.